A bipartisan group of United States lawmakers has introduced legislation to change the tax reporting requirements that will go into effect due to the recently signed infrastructure bill.
House Representatives Patrick McHenry and Tim Ryan introduced the Keep Innovation in America Act which would change the definition of broker as defined in HR 3684, the bipartisan infrastructure bill signed into law by President Joe Biden on Nov. 15. The bill proposes pushing back the mandated reporting requirements — which includes digital asset transactions worth more than $10,000 to be declared to the Internal Revenue Service — from 2024 to 2026.
I introduced this bipartisan bill w/ @RepTimRyan to fix the new poorly constructed #digitalasset reporting requirements.
The Keep Innovation in America Act will provide clarity to innovators deploying the next generation of internet #technology. https://t.co/cAMWsPoiD8
— Patrick McHenry (@PatrickMcHenry) November 18, 2021
In addition, the bill would exempt certain taxpayers from reporting digital asset transactions in cases where they have no reason to know information from wallet holders that would otherwise be required. According to the bill, “miners and validators, hardware and software developers, and protocol developers” are not brokers.
“Consistent and accurate reporting on digital asset transactions is necessary,” states the Keep Innovation in America Act. “Congress must work to bring legal and regulatory certainty to the digital asset industry. Clear rules of the road fosters technology and innovation.”
McHenry added:
“[The law] includes digital asset reporting requirements that threaten to push innovators and entrepreneurs overseas […] We can fix these poorly constructed standards and ensure they are compatible with how this new technology actually works.”
The proposed legislation already has the support of Representatives Kevin Brady, Ro Khanna, Tom Emmer, Eric Swalwell, Warren Davidson, Darren Soto, Anthony Gonzalez, and Ted Budd, in addition to crypto advocacy groups including Coin Center and the Blockchain Association. However, certain senators have been attempting to create their own legislative path to amend the crypto language in the infrastructure law, with a proposal from Ron Wyden and Cynthia Lummis, as well as a separate bill from Ted Cruz, introduced this week.
The introduction of the Keep Innovation in America Act follows a group of Democratic lawmakers signing their names to a Nov. 16 letter for House Speaker Nancy Pelosi. The letter similarly urges revisions to the definition of a broker in the infrastructure law, raising concerns over the effect on the U.S. market and how the country will keep up with technological innovation.
Related: US lawmakers urge CFTC and SEC to form joint working group on digital assets
On Wednesday, a bipartisan group of lawmakers met at a hearing of the Joint Economic Committee to discuss the role of digital assets in government. Tim Massad, the former chair of the Commodity Futures Trading Commission, said at the gathering that the U.S. could introduce a central bank digital currency as one possible solution for improving the country’s payments systems.
